Cranswick PLC
01 February 2008
Cranswick plc ('Cranswick' or 'the Company') - third quarter trading statement
Total sales for the Company in the quarter to 31 December 2007 were £158m, an
increase of 18 per cent compared to the same period last year after adjusting
for the impact of the sale of the animal feeds business in May 2007.
In the food division, turnover increased by 17 per cent compared with the same
period last year, which was pleasing given strong comparatives. Most product
categories showed double digit growth, with sausage and bacon performing
particularly well and benefiting from investment in additional capacity during
the year. Production of premium bacon from the new factory at Sherburn-in-Elmet
commenced on schedule, enabling the high December demand to be met and bacon
activities are currently being consolidated on to this site.
Turnover in the pet division, which accounted for 6 per cent of total Company
sales in the quarter, was up by 37 per cent following better bird food sales.
The aquatics business is now fully operative at Chorleywood following a fire in
December 2006. There has been significant raw material price inflation in the
pet food business, most of which has now been passed on in the finished product
price.
During the second half, the food division has suffered from some sales price
deflation. Furthermore, the industry is experiencing rising input costs in pig
meat, beef and poultry. Whilst Cranswick is benefiting from higher than planned
volume gains, it is currently proving difficult to pass on the full impact of
rising costs. Discussions on this are ongoing with customers. Assuming a
continuation of current conditions, the impact of these two factors, together
with the impact of the fall in the value of sterling on the charcuterie
business, is expected to have a modest negative impact on the results to 31
March 2008. The Directors expect the effect of these issues in the current year
to be approximately matched by exceptional gains of around £1.8m.
Whilst it is disappointing to be experiencing these pressures, which can be
expected to moderate the Company's growth rate, Cranswick is in a very strong
position to capitalise once equilibrium returns to input prices and selling
prices. Our market positions are strong, our plants are well invested, the
business is highly cash generative and we have excellent customer relationships.
Enquiries:
CityRoad Communications
Paul Quade 020 7248 8010 (mobile 07947 186694)
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